City of Ottawa Refuses to Divest from Fossil Fuels
The City of Ottawa has investments in large oil, gas and coal companies. Around the globe, fossil fuels are inevitably being replaced by cleaner renewable energy.
So why will city officials not seriously consider the risk inherent in the City's endowment fund investments in fossil fuels? This is a question that all taxpayers and municipal voters should be asking.
An analysis of these investments by the group 350 Ottawa indicates that over the 9 years since inception of the endowment fund in 2007, returns have been between $6 million and $13 million less than they would have been without the holdings in oil, gas and coal.
Looking forward, the medium-term viability of these investments is particularly uncertain. Recent political decisions, both globally and in Canada, indicate that these industries are on a deterministic downward slide. The Paris Agreement has committed Canada and most other countries to large greenhouse gas emissions reductions by 2030. Canada has already announced a carbon pricing scheme, which will reduce demand for oil, gas and coal.
To summarize, although returns over the past 50 years from investments in fossil fuels have been strong, their performance over the past 10 years is poor, and will worsen as the world becomes serious about reducing carbon emissions.
The City of Ottawa has a moral and fiscal obligation to its taxpayers. It’s time to divest from the fossil fuel industry.